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Perspectives and Problems of Romania and Bulgaria A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Basciani, Alberto Article Growth without development: The post-WWI period in the Lower Danube : perspectives and problems of Romania and Bulgaria The Journal of European Economic History Provided in Cooperation with: Associazione Bancaria Italiana, Roma Suggested Citation: Basciani, Alberto (2020) : Growth without development: The post-WWI period in the Lower Danube : perspectives and problems of Romania and Bulgaria, The Journal of European Economic History, ISSN 2499-8281, Associazione Bancaria Italiana, Roma, Vol. 49, Iss. 3, pp. 139-164 This Version is available at: http://hdl.handle.net/10419/231565 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu 04-basciani_137_164.qxp_04-basciani_137_164 30/10/20 12:28 Pagina 139 Growth without Development: The Post-WWI Period in the Lower Danube. Perspectives and Problems of Romania and Bulgaria Alberto Basciani University of Roma Tre ABSTRACT This article examines the reaction of the Romanian and Bulgarian ruling classes to the great transformations in South-East Europe in the aftermath of World War I. The conflict had revealed the intrinsic weakness of the economic and social structures of all the Balkan nation-states, victors and vanquished alike. This awareness prompted politicians in Romania and Bulgaria to seek massive in- dustrialization accompanied by some social reforms (agrarian re- form, education, etc.) with a view to decisive modernization. A strong industrial base supported by the state through protective poli- cies and public orders seemed the fastest and safest way to trans- form the economic structure of the two countries, which until then had been predominantly agrarian. This economic action was ac- companied by a lively scientific and cultural debate fueled by Bul- garian and Romanian economists convinced that industrialization was the only way to achieve emancipation from underdevelopment and subjection to the Western powers. On the whole, however, this policy approach, artificially supported by the state and inadequately powered by a modest internal market, did not prove capable of re- versing the trend of Bulgarian and Romanian development. On the contrary, it had the effect of shifting precious resources away from the countryside, which remained mired in severe technical and human underdevelopment. 1. Introduction The end of World War I left South-East Europe completely transformed. “For all countries in the region, the winners as well 139 04-basciani_137_164.qxp_04-basciani_137_164 29/10/20 17:40 Pagina 140 ALBERTO BASCIANI as the losers, the war created new development and new beginnings, as well as lasting traumas.”1 The consequence was that the ruling classes shared a pressing need: for the rapid and profound strength- ening of their respective states’ economic and social structures. Es- pecially those of South-East Europe, one of the deepest peripheries of the old continent, which had failed to industrialize during the first decades of the nineteenth century2 and were very frustrated “by lais- sez-faire systems [and so] began to rely on State regulations and pro- tection.”3 In fact, in 1914 these states were endowed with a complex and quite well-defined institutional and administrative architecture, paired with an economic structure that was probably less developed than it had been in the middle of the previous century. Agriculture was the basis of that economy, and policy had not been able to catch up with Western Europe’s general and social development.4 According to John Connelly, the years after World War I wit- nessed the most momentous encounter between the New and Old Worlds since the fifteenth century. “[S]timulated by the French and German Enlightenment, but also by native concerns about subjuga- tion by foreign powers, a series of national movements had emerged [...] all which had one basic message: each nation should determine its own fate.”5 The severe experience of the war and the direct and indirect con- frontation with the industrial powers had revealed the weakness of 1 O. Anastasakis, D. Madden, E. Roberts, “Introduction: The Past is Never Dead...”, in Id. (eds.), Balkan Legacies of the Great War, London, Palgrave Macmillan, 2016, p. 10. 2 Cfr. J.R. Lampe, “Imperial Borderlands or Capitalist Periphery? Redefining Balkan Backwardness, 1500-1914”, in D. Chirot (ed.), The Origins of Backwardness in Eastern Eu- rope. Economics and Politics from the Middle Ages until the Early Twentieth Century, Berke- ley, Los Angeles, London, University of California Press, 1989, pp. 177-209. 3 I.T. Berend, “Economic Nationalism: Historical Roots,” in H. Schulz, E. Kubů (eds.), History and Culture of Economic Nationalism in East-Central Europe, Berlin, BWV Berliner Wissenschafts, Verlang, 2006, p. 34. 4 Cfr. M. Palairet, The Balkan Economies. Evolution without Development 1800-1914, Cam- bridge-New York, Cambridge University Press, 1997, pp. 1-3. 5 J. Connelly, From Peoples to Nations. A History of Eastern Europe, Princeton, London, Princeton University Press, 2020, p. 359. 140 THE JOURNAL OF EUROPEAN ECONOMIC HISTORY 04-basciani_137_164.qxp_04-basciani_137_164 29/10/20 17:40 Pagina 141 GROWTH WITHOUT DEVELOPMENT: THE POST-WWI PERIOD IN THE LOWER DANUBE. PERSPECTIVES AND PROBLEMS OF ROMANIA AND BULGARIA the industrial sector in the Balkan nations.6 Generalized poverty pre- vailed, with only small-scale infrastructures and modern industrial sectors,7 poor urbanization, the general backwardness of those agrarian societies, dominated by a rigid class structure.8 Such a sit- uation resulted in poor quality military equipment, poor troop train- ing, and consequent frictions among soldiers on a daily basis. In fact, the huge losses registered by the Balkan armies were among the greatest of all the forces involved in the War.9 The difficulties encountered in the post-war period – marked by 6 With the exception of Bulgaria, all the Balkan countries were subjected to a regime of enemy military occupation aimed not only at controlling the territory but also at ex- ploiting it economically. The occupation by the Central Powers in Romania was partic- ularly harsh: practically all the country’s agricultural and mining resources were diverted to support the war effort and the civilian population in Germany first of all but in part also in the other Central Powers. A report of a special committee by the Ger- man administration said that the purpose of the German army was: “the fullest ex- ploitation of the occupied part of Rumania in order to secure and export as quickly as possible everything that could be useful for war purposes and for provisioning for the allied countries.” D. Mitrany, The Effect of the War in Southeastern Europe, New Haven, Yale University Press, 1936, p. 141. 7 Despite some progress around the turn of the century, it was really only after World War I that the Balkan countries were able to effect sweeping structural change in the economy. For example, around 1910 the employment rate in industry was 7% in Serbia and around 10% in Romania and Bulgaria. It was a bit higher in Croatia (which in those years was still an Austro-Hungarian province) at 13% of total workforce. Cfr. J.R. Lampe, op. cit., in D. Chirot (ed.), op. cit., pp. 195-202; M. Palairet, op. cit., pp. 203-340. 8 The Romanian Principalities were characterized by large agrarian estates, and in the rest of Balkans, especially at the turn of the 20th century, the traditional village commu- nities (the zadruga for example) were disintegrating and a sort of primitive capitalism emerged, while lack of financial credit pushed the smaller agrarian estates into debt. According to Ivan T. Berend “[...] a rich peasant-merchant elite exploited this situation and lent money at usurious rates of interest [...] this peasant-merchant stratum was one of the elements forming a new native bourgeois elite [...] the independent state author- ities determined and controlled activities, and the powerful people rallying around them formed the core of a developing upper social stratum [...]” I.T. Berend, Decades of Crisis. Central and Eastern Europe before World War II, Berkley, Los Angeles, London, Uni- versity of California Press, 1998, pp. 41-42. 9 Between 1915 and 1918 Bulgaria lost 101,248 soldiers, Romania 335,706, Serbia 127,535, Greece 28,000 and Montenegro 3,000. If we add the losses suffered by the Balkan armies during the two Balkan Wars (October
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